Predictions 2011

  It’s prediction time again, and another chance for political commentators to fall flat on their faces.  Who could have forecast, twelve months ago, that the Liberal Democrats would be in government by now?  Or that the Scottish transport minister would resign because he got the weather forecast wrong?  Or that Vince Cable would become public enemy number one for introducing  £9,000 tuition fees in England? 

    Reality often turns out to be far more bizarre than anyone could have imagined, which is the fun of crystal ball gazing.  Who could have imagined that the stock markets would boom in 2010, even as a sovereign debt crisis was sweeping Europe?  Or that Scotland’s referees would go on strike?  Or that Ed Miliband would beat his brother David Miliband in a knife edge race for the Labour leadership?   Prediction is a mug’s game, but here are mine. 

     First off, the Oldham East and Saddleworth by-election on 13th January.  This will be Ed Miliband’s first serious electoral test, and the chances are that Labour will win - even though the contest was triggered by the Labour MP, Phil Woolas, being found guilty of lying to the voters.  No, you couldn’t make it up - even if he did.   Had these been normal times,  ‘Old and Sad’ would’ve been a shoo-in for the Liberal Democrat candidate, Elwyn Watkins, who only lost by 103 votes at the general election.   But these are not normal times.   The LibDems have become electoral pariahs thanks to their coalition with the Tories. 

   Victory in the first by-election of 2011 will bring relief for Ed Miliband, who’s been having serious difficulty establshing himself as Labour leader,  and not a staring-eyed policy wonk.  Miliband will step up his campaign to lure disaffected Liberal Democrats to join Labour.  My forecast is that he will succeed, and that a number of prominent LibDem MPs will be seriously considering crossing the floor in the next six months. 

   Miliband will get another boost, of a kind, in March when Wales votes in the referendum on handing primary law making  powers to the Cardiff Assembly, bringing it broadly into line with Holyrood.  This is the fruit of the Labour-Plaid Cymru coalition, and the ‘yes’ result is almost certain.  Which goes to show that Labour and Nationalists CAN work together when they really want to, even on highly controversial constitutional reforms.  Iain Gray and Alex Salmond take note.  It’s what the voters want to see. 

   Labour and Plaid have also joined forces to block  £9,000  tuition fees in Wales.  The Welsh Labour’s education minister, Leighton Andrews,  has promised to subsidise Welsh students by getting English students to pay full fees for studying in Welsh universities and EU students to pay partial fees.   The Scottish government is very  interested in this and hopes to bridge the Scottish funding gap by doing something similar.  But this will raise howls of protest this winter from English Conservative MPs, and some Labour MPs, who will accuse Holyrood of educational apartheid, and even racial discrimination, on the grounds that English students are being unfairly treated in their own country.  

   Matters will come to a head during the passage of the Scotland Bill introducing the Calman tax reforms to Holyrood.  Many English MPs, are already demanding the abolition of the Barnett Formula as part of the deal.  The Former Tory Scottish Secretary, Michael now Lord Forsyth, ignited a Boxing Day parcel bomb by promising to table an amendment calling for a new referendum on tbe bill, which he says will take Scotland headlong down the road of fiscal separatism.  This could be an opportunity for English Conservatives, egged on by the press, to mount a serious challenge to a measure they regard as Liberal Democrat constitutionalism gone mad. 

     But it will also be an opportunity for Alex Salmond to call for any such referendum to include the option of full fiscal autonomy.    After all, everyone seems to be having referendums in 2011 except the Scots - there's also a vote on the AV voting system in May.   The prospect of this unholy alliance between English Tories and Scottish Nationalists will ensure that no such referendum amendment will be passed by their Lordships.   However,  the Scotland Bill is looking a lot more interesting,  and there could be many a slip before it finally arrives on the Statute Book.  The ratchet of fiscal autonomy will be advanced by another notch in 2011. 

   

   UK politics is likely to be dominated in 2011 by another ghost of the 1970s: inflation.   The Bank of England has overshot its 2% inflation target now for 11 months straight, which is a record even for the inconsistent forecasters of Threadneedle Street.  RPI inflation is currently running at 4.6%, and  is likely to go through the roof in the new year as oil prices rise, VAT is increased and global food shortages inflate the world market prices for grain. Oil is the big one, since almost everything that we buy is dependent on it, and crude prices are expected to top $100 a barrel for the first time in two years.   

   British voters will suddenly discover in 2011 that they are getting poorer very fast.  As the banks continue to tighten lending,  UK house prices will continue to fall throughout the year, and we will start to see headlines about negative equity. This will create a climate of unrest among employees who have taken two years of pay cuts and part time working and were hoping to get some kind of reward.  But like the Irish, they are finding that the only people who get rewards are bankers. 

    At the very least, voters will want to vent their wrath on the Liberal Democrats - Cameron's human shields. This is bad news for supporters of electoral reform because it means the referendum on the Alternative Vote will fail.   The problem with referendums is that people rarely vote on the question on the ballot paper. 

 Oh yes, and there is one other ballot.  The Scottish Parliamentary elections also on May 5th. will seal Alex Salmond’s fate.  The polls are going Labour’s way, but I still think it’s too close to call right now.As I say,  prediction really is a mug’s game.  Happy New Year.